Liferep.net

Monday October 27, 2014

// October 27th, 2014 // Comments Off on Monday October 27, 2014 // Daily News

Weighing the pros and cons of annual tax-loss harvesting

It’s among the most popular tools available for maximizing after-tax returns. But unbeknownst to many investors, the practice of harvesting losses to offset capital gains also comes with some pretty sizable downside risks.
Some say the benefit of tax-loss harvesting is overstated, that the net effect of selling securities that are down and buying them back really just amounts to a tax deferral for most.
Others maintain that the cumulative effect of harvesting losses year after year can inadvertently subject investors to a higher capital gains rate later on, which negates any savings and then some.
And then there’s the risk to your return, the opportunity cost of taking your money off the table when a stock you wish to own is temporarily down.
“Tax-loss harvesting flies in the face of the most fundamental rule of investing, which is buy low and sell high,” said Jonathan Citrin, founder and chief compliance officer of CitrinGroup, who nonetheless notes that loss harvesting may make sense for certain investors. “Assets that are down are not necessarily a bad thing.”
If it’s a stock that provides diversification benefits and balance to your long-term returns, he said, that’s the time to buy. “It is such a fundamentally flawed approach—selling important diversifiers in a portfolio for a few bucks saved on taxes,” he said. “Investors must think long-term and actually buy into uncorrelated assets that have depreciated during a surging market despite how confident one might be in the continuance of equity growth.”
Tax-loss harvesting is most common in the fourth quarter of the year, when investors are scrambling to minimize their tax liability to Uncle Sam.
The Internal Revenue Service allows investors to offset all of their capital gains with losses realized in a given year.
Generally, long-term losses on securities held for more than a year are netted first against any long-term capital gains, while short-term losses on the sale of securities held for less than a year get applied to short-term gains, which are taxed at your higher ordinary income tax rate. The highest income tax bracket in 2014 is 39.6 percent.
Any additional losses can be deducted up to $3,000 per year against ordinary income, while losses in excess of that limit can be carried forward to future tax years to reduce capital gains or ordinary income until the balance of the losses are used up.
Most often, tax-loss harvesting is used to limit short-term capital gains.
To generate a loss, investors often sell securities that play an important role in their portfolio but are temporarily down.

Today’s Inspiration

Speak Positively

by Joyce Meyer – posted October 27, 2014

Behold, You desire truth in the inner being; make me therefore to know wisdom in my inmost heart.
—Psalm 51:6

Focus on speaking words in faith today; keep your confession truthful but positive. Don’t deny the existence of your circumstances, but confess what God’s Word has to say about your situation.

For example, if you are sneezing, coughing, and finding it difficult to breathe, it isn’t truthful to say you aren’t sick. But you can learn to present a negative situation in a positive way. You can say, “I believe.”

Wednesday October 22, 2014

// October 22nd, 2014 // Comments Off on Wednesday October 22, 2014 // Daily News

Consumer prices barely rise as energy costs fall

U.S. consumer prices rose marginally in September as energy costs fell broadly, painting a weak inflation picture that should give the Federal Reserve ample room to keep interest rates low for a while.
The Labor Department said on Wednesday its Consumer Price Index edged up 0.1 percent last month after declining 0.2 percent in August. Economists polled by Reuters had forecast consumer prices being flat in September.
The CPI increased 1.7 percent in the 12 months through September after a similar rise in August. The CPI-W index, which is used to make adjustments for Social Security payments rose 1.7 percent in the third quarter from the year earlier.
Inflation has waned in recent months after quickening in the second quarter, in part as a strengthening dollar and slower economic growth in China and the euro zone dampen imported price pressures.
Weak inflation and a recent global equities market sell-off could see the U.S. central bank in no rush to start raising its benchmark overnight interest rate, which it has kept near zero since December 2008.
Financial markets now expect the first interest rate hike in the fourth quarter of 2015 instead of the second quarter.
Stripping out food and energy prices, the so-called core CPI ticked up 0.1 percent last month after being unchanged in August. In the 12 months through September, the core CPI rose 1.7 percent after advancing by the same margin in August.
The Fed targets 2 percent inflation and it tracks an index that is running even lower than the CPI.
In September, energy prices fell for a third straight month, with gasoline prices slipping 1.0 percent after dropping 4.1 percent in August. Food prices gained 0.3 percent after rising 0.2 percent in August.
Within the core CPI, shelter costs increased 0.3 percent in September after rising 0.2 percent in August. The shelter index was up 3.0 percent in the 12 months through September, the largest gain since January 2008.
Airline fares declined for a third straight month, while prices for new motor vehicles and apparel were unchanged.

Today’s Inspiration

The Spirit of Holiness

by Joyce Meyer – posted October 22, 2014

And [as to His divine nature] according to the Spirit of holiness was openly designated the Son of God in power [in a striking, triumphant and miraculous manner] by His resurrection from the dead, even Jesus Christ our Lord (the Messiah, the Anointed One).
—Romans 1:4

Today’s verse refers to the Holy Spirit as the Spirit of Holiness. He is called by this name because He is the holiness of God and because it is His job to work that holiness in everyone who believes in Jesus Christ as Savior.

God wants and instructs us to be holy (see 1 Peter 1:15–16). He would never tell us to be holy without giving us the help we need to make us that way. An unholy spirit could never make us holy. So God sends His Spirit into our hearts to do a complete and thorough work in us.

In Philippians 1:6, Paul teaches us that God, Who began a good work in us, is well able to complete that work and bring it to its finish. The Holy Spirit will continue to work in us as long as we are alive on this Earth. God hates sin, and anytime He finds it in us, He quickly works to cleanse us of it.

This fact alone explains why we need the Holy Spirit living inside of us. He is there not only to lead and guide us through this life, but also to immediately work in cooperation with the Father to remove from us anything that is displeasing to Him. He will both speak to us about the things that need to change so we can grow in holiness and empower us to make the changes we need to make.